Lower Internet Rates for Indonesia?

Government Hints at a 20 – 40% Reduction in Internet Tariffs is Just Ahead.

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(6/14/2008)

The Government has declared its intention to lower Internet rates between 20 and 40 percent in the coming months.

The government has asked the Indonesian Internet Service Provider Association (APJII) to analyze all the cost components involved in providing Internet services in order to establish the exact amount of reductions to be granted to Internet customers.

According to The Jakarta Post, the international bandwidth tariff constitutes 40% of all Internet costs. The "back haul component" which connects Internet Service Providers (ISP's) with infrastructure providers comprises 30% of costs. The remaining 30% of the cost is incurred in the "last mile component" or the physical connection between the ISP and the consumer.

ISPs are resisting calls to lower costs, urging the government to focus instead on computer penetration, improving financial mechanisms for ISPs and creating additional frequencies for more wireless access.